Elon Musk’s months-long run as the richest man on the planet has come to an end. The Tesla shares registered a 6% tumble when the markets opened on Monday, the largest one-day drop in the past six months. It registered a further 10% slide on Tuesday after investors became keen on selling off. Within two days, Musk’s net worth dropped 30 billion USD. The epic loss occurred due to two main reasons.
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- The downturn of tech stocks
- Fluctuations in Bitcoin price
Bitcoin rose to a record value after Musk announced buying USD 1.5 billion bitcoins. The company also encouraged its customers to use Bitcoin as payment for its car and services.
The frequent tweets and promotions resulted in a Bitcoin price drive. The hype resulted in an 800% bitcoin price increase.
While it seemed like good news for Bitcoin, the unusual hype triggered worry in the minds of central bank regulators.
Janet Yellen, the US Treasury Secretary came out in the open on Monday to warn regarding Bitcoin.
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She insisted that cryptocurrency is an inefficient method to conduct a transaction. Bitcoin’s volatility became evident when it tumbled over 16%.
Should we?— Elon Musk (@elonmusk) February 21, 2021
According to star analyst of Wedbush Daniel Ives, Musk’s bitcoin investment has become a story worth remembering in Wall Street.
While Musk’s move initially made him billions in profit, the risk associated with cryptocurrency has become evident with the current crash observed.
According to Ives, Musk’s decision to invest in bitcoin seems risky as investors have shifted their attention from the Electronic Vehicle mission to the future of Bitcoin.
While Tesla recovered its stock value slightly by Tuesday mid-day trading, Musk lost his richest person on Earth position to Jeff Bezos, Amazon CEO. Musk’s shares are currently trading 10% below the record-high price attained last month.